The Standard covers: insurance contracts the entity issues, reinsurance included; reinsurance contracts it holds; and those investment contracts it issues that carry discretionary participation features, as long as it also issues insurance contracts. References to insurance contracts extend to reinsurance held and to those investment contracts except where paragraphs 60 to 70A and 71 modify them, and to contracts obtained through a transfer or a business combination. Out of scope are: warranties given by a manufacturer, dealer or retailer; assets and liabilities of employers arising from employee benefit plans; rights contingent on a non-financial item being used in future; residual value guarantees; financial guarantees, unless the issuer has in the past stated that it treats them as insurance, in which case it chooses IFRS 17 or the financial instruments standards irrevocably for each contract; contingent consideration in a business combination; contracts under which the entity is itself the policyholder, reinsurance held aside; and credit card and similar contracts priced without reference to the insurance risk of an individual customer, other than any insurance cover IFRS 9 requires to be separated. Two further choices exist. Fixed-fee service contracts may instead fall under IFRS 15 where the price ignores the risk of the individual customer, compensation takes the form of services rather than cash, and the insurance risk comes from the customer using the services (irrevocable, for each contract). Contracts that cap compensation at the amount needed to settle the policyholder's obligation, such as loans that are waived on death, may be accounted for under IFRS 17 or IFRS 9, chosen irrevocably for each portfolio.
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